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Professional Responsibility

Lou is a lawyer. While he was having lunch with a friend, Frank, he learned that Frank’s sister, Sally, had decided to dissolve her marriage. At Frank’s request, Lou telephoned Sally, told her that Frank had asked him to call, and offered to represent her. They set up an appointment for the next day. During the appointment, Lou began the discussion by talking about his fee. Sally told Lou she had no money, but admitted jointly owning with her husband some art valued at $1,000,000. Lou agreed to accept a payment of 50 percent of any assets awarded to Sally in exchange for representing her. Lou and Sally memorialized the agreement in writing. Over the next month, Lou found himself attracted to Sally and eventually asked her to go out with him. She accepted, and they began dating on a regular basis, including having consensual sexual relations with each other. Soon after Sally filed for dissolution, her husband’s lawyer called Lou and made a property settlement offer. Lou told the lawyer the offer was ridiculously low and he would not insult Sally by telling her about it. Sally learned about the offer from her husband. She thought it was a good offer and was incensed that Lou had turned it down. When she asked Lou about it, he told her he was looking out for her best interests. What ethical violations, if any, has Lou committed? Discuss.


This answer provided by Cal Bar Tutorial Review, 800-348-2401 or 800-783-6168, www.cbtronline.com. I. Ethical Violations of Lou A. Solicitation A lawyer must not seek fee-paying work by initiating contact with a prospective client with whom the lawyer has no family or prior professional connections. In contrast, a lawyer may volunteer legal advice to family members, clients, and former clients, and may also take legal business arising out of that volunteered advice. Given the fact Lou’s friend Frank was not a family member or client when he suggested that Lou contact his sister Sally who had decided to divorce, it is likely that Lou’s subsequent contact of Sally amounted to an improper solicitation. Lou’s initial telephonic contact with Sally — compounded by his luncheon appointment with her — when he did not have a prior professional connection with Sally additionally supports this conclusion. The application of this rule is further appropriate given the fact Lou was not offering free legal advice to Sally given the contingency agreement for his services that he arranged with Sally. B. Contingency Fee Arrangement Contingency fees are prohibited in domestic relations cases where the contingency is securing a divorce on the amount of a property settlement. Further, where there is doubt about whether a contingent fee will serve the client’s best interest, the lawyer should offer alternative bases for the fee. Although Lou began the discussion with Sally at their first meeting by “talking about his fee,” his subsequent agreement to accept a “payment of 50 percent of any assets awarded to her” for her representation would seem to be a violation of the contingency rule. In contrast, Lou might contend that the contingency fee arrangement was in Sally’s best interest if she was otherwise unable to pay for his services and that the contingency arrangement was therefore a reasonable alternative despite the general rule against this fee arrangement. C. Duty of Loyalty 1. Potential Conflict of Interest Generally, a lawyer must not allow his personal interests to interfere with his duty of loyalty to the client. Further, a lawyer must not represent a client if the representation of that client may be materially limited by the lawyer’s own interests unless the lawyer reasonably believes that the representation will not be adversely affected and the client consents after consultation. As discussed above, the contingency fee arrangement potentially resulting in a payment of 50 percent of Sally’s ultimate assets could be viewed as a conflict of interest unless the argument can successfully be made that it would not adversely affect Sally’s interests because it would give Lou additional incentive to work for an even more lucrative settlement. Or, that the contingency arrangement was the most practical payment alternative for Sally if she was otherwise unable to pay for competent legal services. Lou would additionally argue that his luncheon consultation with Sally and their “memorialization” of the agreement in writing constituted sufficient consent. Lou would also have difficulty proving that his dating and, later, intimate relationship with Sally did not create a potentially compromising conflict of interest with his legal representation of her. Although Lou might argue that the dating relationship and its evolution into something more intimate arose out of Sally’s implied consent, the combination of Lou’s financial stake in the outcome of the proceeding coupled with this emerging emotional relationship with Sally created at the very least the appearance of impropriety with the confusion of legal and unrelated issues. D. Duty of Competence A fundamental duty to completely represent the interests of one’s client as a reasonably prudent attorney may have been compromised because of the potential conflicts of interest noted above. Although the content of the settlement offer made by her husband’s attorney is unknown, Lou would need to justify his decision to reject the offer as reasonable. Lou might contend that the offer was made “soon after Sally filed for dissolution” and that it should only be perceived as an initial negotiation tactic by the husband’s lawyer. Lou would need to support his conclusion that the offer was, indeed, “ridiculously low” and not in Sally’s best interest. E. Duty to Communicate Candid Advice A lawyer must exercise judgment and render candid advice to the client, including economic advice that may be relevant to the client’s situation. In addition, such advice must be volunteered even when the client does not directly ask for it. Lou’s failure to communicate the lawyer’s initial offer and to explain why he believed it to be “ridiculously low” in view of Sally’s economic situation should certainly be viewed as a potential ethical violation. Lou’s decision that “he would not insult Sally by even telling her about it” was also inappropriate and further reinforces the argument that this was an ethical violation. The fact that Sally learned of the offer from her husband — an adverse party — and that she thought it was a “good offer” additionally highlighted the need for Lou to discuss it with her so that Sally could make a fully informed opinion. Lou’s assertion that “he was looking out for her best interests” without fully communicating the economic implications of the offer was an inappropriate substitute for an open discussion with his client. Ultimately, the decision to accept her husband’s offer was Sally’s — not Lou’s — and ideally should have been based on her complete understanding of the legal and economic issues relevant to her situation as communicated by her lawyer. F. Duty of Candor to Court Although an attorney generally has no duty to volunteer harmful facts about his client’s case, he may be subject to discipline for knowingly making a false statement of fact to the court. An attorney’s failure to speak out could be construed as the equivalent of an affirmative misrepresentation. Presuming the court hearing the case would be interested in all settlement offers as a function of its duty to administer justice, Lou’s failure to mention it or that he even communicated its content with his client could be viewed as a potential ethical violation. In contrast, however, Lou would contend that the offer was only an initial negotiating tactic and within his discretion to treat it as such so that his need to inform the court was unnecessary. Further, that the subject of communication with his client was protected by the duty of confidentiality, including any tactical decisions that did not involve a full discussion with his client. G. Duty of Professional Integrity All lawyers owe a duty to protect the integrity of their profession and may be subject to discipline that is prejudicial to the administration of justice or through conduct that demonstrates dishonesty, untrustworthiness, or unfitness to practice law. Should any of the previous potential ethical violations be proved, Lou could additionally be found to have violated his duty to maintain the integrity of his profession. In particular, Lou’s conduct in potentially and adversely affecting his representation of Sally’s best interests through any conflicts of interests he may have with her would especially serve to violate this duty. It could be argued that Lou should have mandatorily withdrawn from his representation of Sally upon a showing that his continued representation of her would violate any of the disciplinary rules discussed above. If so, Lou would need to have given her reasonable notice and an opportunity to hire another lawyer.

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